SiGMA

Spending at US casinos surpassing other recreations in 2021

Posted:: Jun 04, 2021 12:15 Category: Casino , Americas , Posted by Maria

Since the third quarter of 2020 the gaming sector “outperformed” other recreational activities with regards to spending

By Buck Wargo – SiGMA US correspondent

A significant spending gap was registered between casinos and other recreational activities, giving rise of a strong post-Covid recovery in the gaming industry.

According to Deutsche Bank casino industry analyst Carlo Santarelli, since the third quarter of 2020 the gaming sector, which includes casinos, horse racing and lotteries, have “outperformed” other recreational activities with regards to spending.

That data comes from the Bureau of Economic Analysis.

Santarelli said that, so far 2021 has showed an accelerated performance, and April marked the widest gap between gaming and recreational spending during the COVID-19 pandemic since casinos reopened in 2020.

Carlo Santarelli,“We noted that gaming was undoubtedly a COVID winner, relative to other areas of recreational spend, although not necessarily an outright winner given the damage caused to balance sheets (of casinos) during the closures,” Santarelli said.

Casinos have benefited considerably from the disruptions in other industries.

Between 2016 and 2019, total domestic gaming spending across casinos, lotteries, and horse racing accounted for 25.3 per cent of total recreational spend a year.

In 2020, gaming ticked up to 25.9 per cent while it was “clearly hampered” by the casino closures in the second quarter of 2020 that distorted the annual data.

However, during the third quarter of 2020, spending on gambling represented 28.7 per cent of recreational spending while combined spending on amusement parks, concerts, movie theaters and spectator sports fell to 8.6 per cent in the third quarter of 2020, signifying an extra $3.2 billion pumped into gaming, Santarelli said.

The positive trend continued during the fourth quarter of 2020 with a gaming spending of $29 billion, or up to 28.8 per cent, while other recreational spending was 9.2 per cent, down from the 26.2 per cent in the fourth quarter of 2019.

When 2021 ushered in, it showed a different picture that better reflects where money flowed during the COVID-19 pandemic.

According to Santarelli, that’s where “the real boost” occurred.

Gaming spending climbed to 30.6 percent of recreational spending, pumping $5.8 billion in revenue into the gaming segment from other recreational areas.

“We believe this data is very telling and clearly shows how casinos and other forms of gaming benefited from consumer liquidity and closures in adjacent industries.

The trend was accelerated in April and May with $12.3 billion was spent in the gaming US economy.

Santarelli said that history shows that when money is injected into the economy, gaming revenue increases.

Whether that trend continues will be determined this summer and the rest of 2021.

Major League Baseball, the NBA and NHL are allowing packed stadiums while concerts with tens of thousands of people are resuming this summer.

Movie theaters are opening fully and so are amusement parks.

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